Ambika Sheetgrah (P) Ltd.

,, Agra vs Department Of Income Tax on 19 October, 2011 IN THE INCOME TAX APPELLATE TRIBUNAL

AGRA BENCH, AGRA

BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER

ITA No.02/Agr/2011

Assessment Year: 2000-01

Asstt. Commissioner of Income Tax, vs. M/s Ambika Sheetgrah (P) Ltd., Circle 4(1),Agra. 28, Industrial Estate, Nunhai, Agra.

(PAN: AADCA 0965 A).

(Appellant) (Respondent)

Appellant by : Shri A.K. Sharma, Jr. D.R. Respondent by : Shri Navin Garg, Advocate

Date of Hearing : 19.10.2011

Date of Pronouncement : 19.10.2011

ORDER

PER H.S. SIDHU, J.M. :

The Revenue has filed the present appeal against the impugned order dated

05.10.2010 passed by the ld. CIT(A), Agra for the Assessment Year 2000-01 on

the following grounds of appeal :-

"1. Ld. CIT(A) has erred in law and in fact in deleting the addition of ` 6,51,000/- made by the Assessing Officer on account of unexplained share application money without appreciating the facts and circumstances of the case and relying on the submission made by the assessee.

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A.Y. 2000-01

2. Ld. CIT(A) has erred in law and on facts in deleting the addition of ` 6,51,000/- made by the Assessing Officer by treating the share application money as unexplained ignoring the fact that the same applicants were the associates of Ganga Ram Group which was engaged in providing accommodation entries to the needy persons in lieu of money provided by them.

3. Ld. CIT(A) has erred in law and on facts in deleting the addition of ` 6,51,000/- ignoring the facts that the associates of Ganga Ram Group have no capacity to invest such huge money as share capital which is proved from the fact that unexplained money equivalent to share application money had been found credited in their bank account before the issuance of cheque to the assessee for such investment.

4. The order of ld. CIT(A) being erroneous in law and on facts deserves to be quashed and the order of the AO deserv4s to be restored.

5. The applicant craves, leaves to add or alter any or more ground or grounds of appeal as may deem fit at the time of hearing of appeal."

2. The facts narrated by the Department are not disputed by both the parties,

therefore, no need to repeat the same for the sake of convenience.

3. At the time of hearing, the ld. Counsel for the assessee stated that the issue

in dispute has already been decided by this Bench in ITA No.262/Agr/2006 for the

Assessment Year 1998-99 in the case of I.T.O. vs. Aditya Agarwal. We also find

that the ld. First Appellate Authority has decided the issue in dispute on the basis 3 ITA No.02/Agr/2011 A.Y. 2000-01

of the aforesaid order of this Bench. The relevant portion of the order of the

CIT(A) at paragraph no.2.2, page nos. 3 & 4 is reproduced as under :-

"2.2 I have analysed the matter and I find that these three persons mentioned above from whom the assessee company claimed to have received the share application money, have confirmed that they had given the money and their income tax particulars were also provided. The share application money was received through cheques. It is not the case of the Assessing Officer that these three persons were non- existent or fictitious. The sole ground of Assessing Officer for making the addition is that these persons belongs to M/s Ganga Ram group who were famous for giving accommodation entries. The Assessing Officer has discussed the modus operandi of Ganga Ram group but that does not advance the case of the Assessing Officer unless proved that these persons have admitted that they were engaged in giving bogus entries or that the appellant had given cash to these three persons and in lieu thereof got the cheque from them. The Ld. Authorised Representative has aptly relied on the case of ITO vs. Shri Aditya Agarwal wherein on similar facts vide order in ITA No.262/Agr/2006 the Hon'ble ITA, Agra deleted the addition. The appeal filed by the department against this order has been dismissed by the Hon'ble Allahabad High Court vide order date 4.8.2010 in case no.524 in the case of CIT vs. Aditya Agarwal. The issue is also covered by the judgement of Hon'ble Supreme Court in the case of CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195 wherein it was held as under :-

"Can the amount of share money be regarded as undisclosed income u/s 68 of I.T. Act, 1961 ? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgement.

Subject to the above, Special Leave Petition is dismissed." 4 ITA No.02/Agr/2011 A.Y. 2000-01

Following respectfully the above judgement of Hon'ble Supreme Court (supra) and the factual matrix of the case as discussed above, the addition made by the AO is deleted."

4. On the contrary, the Ld. Departmental Representative relied upon the order

passed by the Assessing Officer.

5. We have heard both the parties and perused the relevant records available

with us. We are of the considered opinion that the issue in dispute has already

been decided in favour of the assessee by this Bench in ITA No.262/Agr/2006 in

the case of Aditya Agarwal and the appeal field by the Revenue against ITAT

order has also been dismissed by the Hon'ble jurisdiction High Court as mentioned

by the ld. First Appellate Authority in the aforesaid paragraph. Therefore,

respectfully following the order dated 04.08.2010 of Hon'ble jurisdictional High

Court in case no.524 of 2007 in the case of CIT vs. Aditya Agarwal, the appeal

filed by the Revenue is dismissed.

6. In the result, the appeal filed by the Revenue is dismissed.

(Order pronounced in the open Court on 19.10.2011).

Sd/- Sd/- (B.C. MEENA) (H.S. SIDHU) Accountant Member Judicial Member

Date: 19th October, 2011

PBN/*

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Copy of the order forwarded to:

Appellant/Respondent/CIT concerned/CIT(Appeals) concerned/D.R., ITAT, Agra Bench, Agra/Guard File.

By Order

Assistant Registrar

Income-tax Appellate Tribunal, Agra

True Copy